Rural areas show huge potential for online shopping, says report

A vast majority of Internet users in China's rural areas shopped online in 2014, the findings from a survey showed over the weekend, but analysts said Sunday that establishing sales channels in rural areas is less profitable.

Of the total rural respondents surveyed by US consulting firm McKinsey & Co, 64 percent said they had participated in online shopping in 2014, according to the survey results released in Beijing on Friday. McKinsey & Co surveyed over 6,000 online users across the country to track their buying habits through the Internet.

While packaged food was the top online purchase for the country, the top selling products for online shoppers in China's rural areas were cell phones and flat panel TVs, the report said.

Some of China's leading retailers are moving fast to exploit the rural online shopping market by creating county-level distribution center to facilitate the transport of goods to rural areas, Jayson Chi, a partner in McKinsey's Hong Kong office, said at the press conference Friday.

Rural online shopping has huge potential especially for industries such as cosmetics, but the cost of establishing distribution centers covering the country's vast rural areas is high, an industry insider told the Global Times on Sunday, requesting anonymity.

International brands are lagging behind in moving to establish distribution centers in rural areas compared with local brands which are more familiar with the rural situation, the insider said.

Data from Chinese e-commerce giant Alibaba showed that 10 percent of the company's total online sales volume of 57.1 billion yuan ($9.14 billion) on November 11, known as Singles' Day in China and the country's biggest online shopping festival, came from rural areas.